Foreclosures driving home sales in Ohio

Thursday, February 24, 2011 02:49 AM

By Jim Weiker

THE COLUMBUS DISPATCH

More evidence emerged today that Ohio's housing market is actually two markets: one made up of conventional homes and one consisting of foreclosed properties.

Figures released by the foreclosure-listing service RealtyTrac show a tremendous price gap between foreclosed sales and conventional sales in the state.

During the fourth quarter of 2010, foreclosed homes in Ohio sold on average for $79,611, which is 43percent less than the $138,740 fetched by homes that had not been foreclosed on.

Only Kentucky showed a higher gap between foreclosed- and conventional-home prices.

Overall, foreclosures accounted for 21 percent of Ohio home sales during the period, according to RealtyTrac.

Distressed sales, which include foreclosures and "short sales," account for about 37percent of all sales, according to the National Association of Realtors.

Even though there's a big gap between foreclosed prices and conventional prices, foreclosures can affect the price of other sales because such sales are used to set the value of other properties.

"With more than one in three sales distressed, that really starts to impact appraisals," said Rick Benjamin, president of the Columbus Board of Realtors.

While foreclosures are far more common in poorer parts of town, they can be found throughout central Ohio.

"We also see bank-owned properties in Tartan Fields, in Muirfield, in Upper Arlington, in New Albany and in Bexley," Benjamin said. "They're everywhere, and they'll be with us for a while."

The figures appeared a day after Ohio Association of Realtor figures were released showing that Ohio's home prices and sales are stabilizing.

In central Ohio, 1,034 homes were sold in January, down 3.3percent from January 2010. Homes sold on average for $145,600, off 0.3 percent from a year ago. Statewide, home sales rose 0.4 percent while average sales prices dropped 4.8 percent to $115,439.

While sales and prices aren't rising substantially, local and state officials say the figures illustrate that they have at least stopped their downward spiral.

"Certainly the fact that our level of sales were slightly higher than those of last January is outstanding news and provides optimism for our prospects in 2011," said Meg Hudson, president of the Ohio Association of Realtors.

Nationwide, sales increased 2.7 percent from last January, the first time in seven months that sales activity was higher than a year earlier.

The median price dropped to the lowest level in almost nine years, and the share of sales represented by foreclosures and other distressed properties climbed to a 12-month high.

"It is really a foreclosure-driven market," said Ethan Harris, head of developed markets at Bank of America Lynch Global Research in New York. "I don't think it is a sign of the market returning to health."

Information from Bloomberg News was included in this story.

jweiker@dispatch.com